Workshop onWorkshop on

Transboundary Accidental Water Pollution, Transboundary Accidental Water Pollution, Liability and Compensation: Challenges and Liability and Compensation: Challenges and

OpportunitiesOpportunities 21-22. 05. 2007- Budapest21-22. 05. 2007- Budapest

Zsuzsanna Kocsis-Kupper :Zsuzsanna Kocsis-Kupper :Environmental pollution cases and Environmental pollution cases and

their legal consequencestheir legal consequences

Examined casesExamined casesName of the case

Type of

accident Total cost/Damage claimed

Legal procedures

Amount paid

Sandoz (Nov. Sandoz (Nov. 86)86)

transboundary transboundary

Ch, D, Fr, NlCh, D, Fr, Nl

River pollution: River pollution:

fire at the store fire at the store of the Sandoz of the Sandoz Company Company

D: 31 M DEMD: 31 M DEM

FR: 16 M DEMFR: 16 M DEM

N: 2,7 M DEMN: 2,7 M DEM

Quick Quick settlementsettlement, mixed , mixed proceduresprocedures, Rhine , Rhine CommissioCommission, Action n, Action PlanPlan

Sandoz agreed to Sandoz agreed to pay within 2 yearspay within 2 years

D: 14 M DEMD: 14 M DEM

FR: 13 M DEMFR: 13 M DEM

N: 1,8 M DEMN: 1,8 M DEM

Ch: 5,7 M DEMCh: 5,7 M DEM

Summitville Summitville (Dec 92), (Dec 92), inland USAinland USA

Soil and river Soil and river pollution, spills pollution, spills of cyanide and of cyanide and other other contaminantscontaminants

EPA paid EPA paid $155 $155 MM for the site for the site

Criminal Criminal proceedingproceedings ended in s ended in settlementsettlement

The site is The site is still still operatingoperating

In 2000 the In 2000 the operator operator after 5 after 5 years of criminal years of criminal proceedingsproceedings agreed to pay agreed to pay $27,7 M$27,7 M over 10 over 10 yearsyears (17%, 20 (17%, 20 years)years)

The The Aznalcóllar Aznalcóllar tailing dam tailing dam accident accident ((April, 98April, 98),),

inland inland SpSp

a dam failure at a dam failure at a lead, zinc, a lead, zinc, coppercopper miminene

Total costTotal cost of of the disaster has the disaster has been calculated been calculated at at EUR 377.7 EUR 377.7 MM

Criminal Criminal procedures were procedures were unsuccesful. Civil unsuccesful. Civil claim was claim was rejected. Admin. rejected. Admin. procedure: penalty procedure: penalty of of 45 M EUR fine45 M EUR fine was imposed. MIne was imposed. MIne was closed in was closed in 2001, company 2001, company filed for filed for insolvency. insolvency.

EUR 96 MEUR 96 M spentspent by the by the operator for operator for clean up, clean up, no no additional additional compensaticompensation paid yet on paid yet ((25%, 8 25%, 8 years)years)

The Baia Mare The Baia Mare tailing dam tailing dam accidentaccident ((January, 2000January, 2000), ), transboundary, transboundary,

Ro-HURo-HU

River pollution, River pollution, dam failure:dam failure: cyanidecyanide and and heavy metalheavy metal

The Hungarian The Hungarian State claimed State claimed $$ 143 M143 M as total as total costcost

The criminal The criminal procedure was procedure was suspended. suspended.

Civil procedure: Civil procedure: temporary temporary decision on 15% decision on 15% operation(2005)operation(2005), decision on , decision on operator’s operator’s responsibility responsibility (2006)(2006)

Decisions are Decisions are not enforced, not enforced, the company the company did not pay did not pay anything.anything. The The case concerning case concerning the amount of the amount of damages are damages are still ongoing. still ongoing.

The company The company started an started an insolvency insolvency procedure in procedure in 2006. New env. 2006. New env. licence was licence was obtained in obtained in 2005. The site 2005. The site still operates. still operates. (7 years, 0%) (7 years, 0%)

The Songhua The Songhua river pollution, river pollution, ((November, November, 20052005))

transboundary, transboundary, Cn-RuCn-Ru

River pollution, River pollution, chemical chemical explosionexplosion

Beijing adopted a Beijing adopted a plan that includes plan that includes spending spending $ 1.7 $ 1.7 billionbillion on on restorationrestoration

AdministratiAdministrative ve procedure: procedure: $ $ 125,000 M 125,000 M finefine in Jan in Jan 20072007. The . The civil claim civil claim for for compensatiocompensation was n was rejected.rejected.

1,5 years after the 1,5 years after the accident there are accident there are no intentions on no intentions on claiming state claiming state responsibility, no responsibility, no data on operationdata on operation

What are the legal choices of What are the legal choices of action following an accident?action following an accident?

Against the operatorAgainst the operator (national courts - national or private int. law) (national courts - national or private int. law)

• AdministrativeAdministrative: sanctions are low, fines are ineffective, licences : sanctions are low, fines are ineffective, licences are not are not suspendedsuspended

• CriminalCriminal: usually penal responsibility is rejected, sanctions are : usually penal responsibility is rejected, sanctions are low, ineffective, punishment is not preventivelow, ineffective, punishment is not preventive

• CivilCivil: claims for : claims for compensationcompensation are many times rejected, if are many times rejected, if responsibility is responsibility is establishedestablished, , usually there is usually there is another procedure another procedure concerningconcerning the amount the amount of damageof damage. . TThe operators he operators often often become become insolvent, and insolvent, and at the end at the end compensations are not paidcompensations are not paid

Against the state of originAgainst the state of origin (int. courts, special courts, arbitration - (int. courts, special courts, arbitration - pub. int. law) pub. int. law)

• InternationalInternational: claims for state responsibility are rarely : claims for state responsibility are rarely submitted, not effectivesubmitted, not effective

Other possibilitiesOther possibilities

Outside court settlementsOutside court settlements: : • OK TediOK Tedi mining accident Papua New mining accident Papua New

Guinea, 1984 (500 M USD); Guinea, 1984 (500 M USD); • the the Contara Contara chemical tank accident, USA, chemical tank accident, USA,

1991 (38 M USD); 1991 (38 M USD); • the the Lower FoxLower Fox PCP accident, USA, 1997 PCP accident, USA, 1997

(10 M USD); (10 M USD); • the the Exxon ValdezExxon Valdez, Gulf of Alaska, 1989 , Gulf of Alaska, 1989

(150 M fine, 100 M restitution)(150 M fine, 100 M restitution)

What are the results?What are the results?• The actual amount of compensation paid The actual amount of compensation paid

to the victim’s remains bellow 10% of to the victim’s remains bellow 10% of their claimstheir claims,,

• TheThe clean up costs are clean up costs are mostly mostly born by born by the state or municipalitythe state or municipality and only and only partially by the operatorpartially by the operator, ,

• The The restoration of the environment is not restoration of the environment is not complete, complete,

• The fThe future operation uture operation of the site of the site is is technically technically not securednot secured..

Therefore the conclusion is Therefore the conclusion is thatthat

There is nThere is not yet an effective legal ot yet an effective legal regime to make operators regime to make operators

accountable after the accident: accountable after the accident:

the the procedures are time procedures are time consuming and ineffectiveconsuming and ineffective

Development of legislationDevelopment of legislation

– EC law: development of special environmental EC law: development of special environmental legislationlegislation (modification of the Seveso II directive, (modification of the Seveso II directive, new mining directive, new BREF document, Liability new mining directive, new BREF document, Liability directive, Proposal on Env. crimes) directive, Proposal on Env. crimes)

– General international lawGeneral international law: ILC Articles on : ILC Articles on prevention prevention of transboundary damage from hazardous activitiesof transboundary damage from hazardous activities

– Special liability regimesSpecial liability regimes: Lugano Convention, Basel : Lugano Convention, Basel Protocol, Kiev Protocol (various activities, operator’s Protocol, Kiev Protocol (various activities, operator’s liability)liability)

– Special regimesSpecial regimes: Oil Funds, Nuclear Regimes, : Oil Funds, Nuclear Regimes, Transport regimes (special, limited schemes)Transport regimes (special, limited schemes)

Among the previous Among the previous regimesregimes

• From the point of operator’s liability up till From the point of operator’s liability up till now only the special Oil Funds were really now only the special Oil Funds were really operationaloperational

• There are uncertainities with the There are uncertainities with the implementation of the EC Liability implementation of the EC Liability Directive, problems with the issue of Directive, problems with the issue of financial securities financial securities

• Problems with ratifying the special liability Problems with ratifying the special liability regimesregimes

Not surprising thatNot surprising thatAfter an accidentAfter an accident everyone wants to act everyone wants to act • many new pieces of legislation is adopted, many new pieces of legislation is adopted, • many states join to already existing treaties many states join to already existing treaties

and regimesand regimes

However, attention is mostly paid to However, attention is mostly paid to prevention and the prevention and the issue of liability is issue of liability is never settled effectivelynever settled effectively —even though —even though it is in the interest of all states and it is in the interest of all states and inhabitants. inhabitants.

Pollution does not stop at the Pollution does not stop at the bordersborders

Attention is indeed to be paid to Attention is indeed to be paid to preventive measures, but follow- up preventive measures, but follow- up actions are inevitable as well: actions are inevitable as well:

– Transboundary pollution needs to be Transboundary pollution needs to be tackledtackled

– The operator should be held liable whether The operator should be held liable whether the pollution is inland or transboundarythe pollution is inland or transboundary

The past showed us thatThe past showed us that

• TThere is here is definitely a need for an effective liabilitydefinitely a need for an effective liability regime in the international fieldregime in the international field just as much just as much

• there there is a need for is a need for establishing adequate insurance establishing adequate insurance systems and/or other financial tools for systems and/or other financial tools for rehabilitating the damaged sites and for rehabilitating the damaged sites and for compensating the victims of the accidents.compensating the victims of the accidents.

• Beyond further inevitably necessary discussions, Beyond further inevitably necessary discussions, positive positive actionsactions on behalf of the states are necessary on behalf of the states are necessary::

Let’s not wait for another accident to actLet’s not wait for another accident to act!!

Thank you for your attentionThank you for your attention

and and

wish all of us fruitful discussions!wish all of us fruitful discussions!